Technical Chart Patterns Indicate More Upside Potential

Bitcoin, abbreviated as BTC, has recently ascended beyond the $70,000 threshold for the first time in six weeks. Here’s why acquiring Bitcoin below $70,000 was a strategic move.

Bitcoin Funding Rates Climb to Six-Week Highs

On May 20, Bitcoin surged to a six-week apex of $71,401, a level not seen since April 9, as reported by TradingView. As Bitcoin surpassed the $70,000 psychological milestone, the funding rate also began to ascend. According to Coinglass, Bitcoin’s funding rate escalated to 0.0187%, the highest level since April 9, indicating that the majority of traders are bullish on BTC. A positive funding rate typically signifies a proclivity for leveraging long Bitcoin positions (buyers).

Before Bitcoin’s rise to $70,000, funding rates lingered below the 0.01% mark for the preceding month, suggesting growing confidence among Bitcoin buyers.

BTC Price Technicals Favor Continued Upside

Enhancing investor confidence, the 4-hour Bitcoin chart recently exhibited an inverse head and shoulders pattern, a technical formation used by traders to predict a reversal from bearish to bullish trends.

The inverse head and shoulders pattern in Bitcoin’s chart could signify further upward momentum, according to renowned crypto analyst Moustache, who noted in a May 21 X post:

I told you yesterday that we would see a significant green candle for $BTC. Were you paying attention? Never underestimate an inverse head and shoulders pattern. Altcoins will follow suit.

Bitcoin Chart Fractal Mirrors Historical Patterns

Fractals refer to recurring technical chart patterns across different timeframes and charts, regardless of the scale at which traders view the asset’s price action.

From a fractal analysis perspective, Bitcoin’s current weekly rally resembles its surge in November 2021, when BTC rose from $31,000 in July to $69,000 in November.

If these patterns repeat, Bitcoin could see continued upward momentum in the coming weeks. Furthermore, Bitcoin’s price trajectory mirrors the 2017 bull run, as noted by crypto analyst Jelle, who shared with his over 81,000 followers in a May 21 X post:

Bitcoin is tracing the same path as the 2017 bull run. Turbulent times around previous cycle highs, but once we clear this zone, it’s smooth sailing ahead.

Bitcoin ETF Flows Turn Positive

Institutional inflows into U.S. spot Bitcoin exchange-traded funds (ETFs) have experienced two consecutive weeks of positive inflows after three weeks of net negative outflows.

During the previous week, U.S. Bitcoin ETFs accumulated over $200 million worth of Bitcoin, and over $413 million in the week of May 6, according to Dune. Institutional inflows from ETFs have been a significant driver of the current Bitcoin rally to new all-time highs. By February 15, Bitcoin ETFs accounted for approximately 75% of new investment in the world’s largest cryptocurrency as it surpassed the $50,000 mark.